OECD forecast 3% growth for Israel in 2015

The rebound in domestic demand that is expected to follow the end of the Gaza conflict, the projected strengthening of the external environment.

In its latest economic forecast summary for Israel the OECD predicts that the Israeli economy will recover from its current slowdown and return to 3% GDP growthnext year.

The international economic development group had predicted in May 2014 that the economy would grow 3.5% next year.

In its latest forecast the OECD noted, "After a pronounced but temporary weakening in 2014, growth is projected to rebound to about 3% in 2015 and 3.5% in 2016, which should avert any rise in unemployment.

The rebound in domestic demand that is expected to follow the end of the Gaza conflict, the projected strengthening of the external environment and the recentweakening of the exchange rate will sustain activity."

Hinting that the OECD supports the policies of Minister of Finance Yair Lapid, the OECD added, "The economy should also be supported by ever-lower interest ratesand a pause in fiscal consolidation in 2015." The group called on Israel to continue its expansionary monetary policy, but stressed the need to keep the roaring real estate market from overheating as a side effect. The OECD also praised the government’s fiscal restraint.